Mortgage Applications Surge as Rates Fall in Latest Week
by:Tom Moeller
|in:Economy in Brief
Summary
- Refinanced loans nearly double; purchase loan applications are strong as well.
- Fixed-rate mortgages decline.
- Average loan size surges.
Mortgage applications increased 20.0% (49.4% y/y) in the week ended April 4, after falling in each of the prior three weeks, according to the Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a home rose 9.2% (24.5% y/y) last week, following a 1.5% rise in the prior week. Applications to refinance existing mortgages surged 35.3% (92.9% y/y) last week after declining 5.6% in the week ended March 28.
The effective interest rate on a 30-year fixed rate loan declined in the week ended April 4 to 6.79% from 6.88% in the week ended March 28. The effective rate on a 15-year fixed rate loan declined to 6.09% in the week ended April 4 from 6.19% in the prior week. The rate on a 30-year jumbo loan fell to 6.77% last week from 6.90% in the week ended March 28, while the rate on a 5-year ARM dropped to 6.04% in the latest week from 6.26% in the week ended March 28.
The share of applications to refinance an existing mortgage rose to 43.6% in the week ended April 4 from 38.6% in the prior week. That share had reached a low level of 38.7% in the week of February 14. The share of loans with an adjustable rate rose to 8.6% in the latest week from 6.5% in the prior week.
The average size of a mortgage loan rose 8.2% (10.6% y/y) to $429,200 in the week ended April 4, following a 0.3% slip in the prior week. The average size of a loan to purchase a home rose 1.0% (0.6% y/y) to $452,100 in the latest week from $447,500 in the week prior. The average size of a loan to refinance an outstanding mortgage increased 26.6% (50.6% y/y) to $399,600 in the week ended April 4 from $315,700 in the week ended March 28.
The Mortgage Bankers Association Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver’s SURVEYS database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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